Oakley, Inc., a sports apparel and eyewear and apparel maker that sells products throughout the U.S., currently has an endorsement agreement in place with the No. 1-ranked golfer, Rory McIlroy. This contract apparently covers eyewear and apparel, giving Oakley the exclusive right to McIlroy’s advertising endorsements.
Or that is what Oakley believed until they recently learned that McIlroy has entered into an endorsement agreement with Nike Golf for a reported $200 million. Though that amount has yet to be confirmed by either Nike or McIlroy, Oakley had attempted to step in and employ its right of first refusal by making its own offer to McIlroy.
However, Oakley claims that McIlroy ignored this counteroffer and has proceeded with the Nike deal. As a result, Oakley has filed a lawsuit against both McIlroy and Nike for breach of contract. Oakley claims that it has suffered irreparable damage.
Oakley reportedly believes that these matters are pressing, and that an immediate injunction is necessary to prevent further damage to its business. Oakley claims that it has already spent $300,000 in advertising costs preparing for the upcoming 2013 product year that it was expecting to be endorsed by McIlroy.
Will Nike move over and allow Oakley to remain in an exclusive relationship with top-seeded McIlroy, or is the Nike contract limited to products other than eyewear and apparel which do not infringe upon Oakley’s contractual rights? These questions will be addressed as this contract dispute moves forward.
Source: YAHOO! Sports, “Report: Oakley sues Rory McIlroy and Nike over breach of contract,” Jonathan Wall, Dec. 17, 2012